Monday, September 21, 2009

Miller On The Move

Chattanooga-based tow truck maker Miller Industries has positioned itself well to handle the recession and is already calling back some workers it furloughed earlier this year, officials said.

The company had furloughed 256 workers as demand for the company’s products slowed.

But even as the company’s sales fell in the second quarter, its profits were up, and Miller has brought back about 85 workers.

J. Vincent Mish, Miller’s chief financial officer and executive vice president, said he hopes to continue to bring more back as the economy improves.

“We got through it just trying not to lose people,” Mr. Mish said. “They still have a job, and we didn’t have to lay anybody off.”

The callbacks at the Ooltewah-based company have been possible because of cost-cutting efforts such as the furlough program and a lean manufacturing process that includes the use of robots and a unique color-coding system for its parts and fixtures — all of which made a profit increase possible during a time when sales were declining.

Miller had net sales of $54.3 million in the second quarter, down 27 percent compared to $74.7 million in the second quarter last year. The company’s income was $1.4 million in the second quarter, or 12 cents a share, up 32 percent from compared with $1 million, or 9 cents a share for the same period of 2008.

“In these extreme economic conditions we are pleased with our second quarter results, which reflect our efforts to offset softening demand through careful cost control measures,” Mr. Badgley said in the company’s earnings statement.

Miller Industries, started in the early 1990s but with roots back to the earliest days of the tow-truck industry, employs 700 people worldwide with about 400 of them in Ooltewah. The rest are divided among the company’s facilities in England and France.

The company has about 300,000 square feet of manufacturing space at its campus off I-75. The space is used to manufacture the large, heavy-duty trucks and the smaller trucks.

Miller’s furlough program, instituted in April, has allowed employees to work four weeks and take off one week. During the off week, workers received unemployment pay.

Bill Beckley, corporate director of human resources, said the company worked closely with the state to set up the program.

“Rather than laying off 20 percent of our work force, we set up this program where we kept everyone on benefits,” he said.

About 56 of the furloughed employees came from the small wrecker plant, built in 2006 as part of a $10 million expansion. The plant exemplifies the lean manufacturing process with six robots, bought three years ago for about $350,000 a piece. They assist with welding projects and other work that requires a great deal of precision, said Jamison Linden, the plant’s manager.

“Using the robots helps with consistency and the quality of the part,” Mr. Linden said.

In the coming years, the robots are expected to more than pay for themselves with the efficiency they have added to the operation, officials said.

A color coding system used in the plant also allows workers to find parts quickly. A stack of shelves filled with different colored items is set up so that individual vendors fill the bins themselves, another cost-saving measure.

As part of the cost cutting efforts, Miller executives voluntarily reduced their salaries by 10 percent in 2008 and continued that in 2009.

The company’s leaders, however, remain concerned about how long the current economic condition will last, Mr. Badgley said in the earnings statement.

“We will continue to proactively position our business and invest in the further enhancement of our product offering to enable the company to take advantage of the eventual rebound in our markets,” he said in a statement.